Monitoring Corporate Agribusiness From a Public Interest Perspective
A.V. Krebs  Editor\Publisher
Issue #136                                                                      December 11, 2001

YEAS 215 - NAYS 214:

HELENE COOPER, DAVID ROGERS & JIM VANDEHEI, THE WALL STREET JOURNAL: The U.S. House, in a historic but rancorous party-line tally, approved by a single vote fast-track authority for President Bush to negotiate trade deals. Only 21 Democrats joined 194 Republicans to give the GOP leadership the 215-214 tally needed for passage, a cliffhanger that left some combatants on both sides of the aisle extremely emotional. With a flurry of last-minute horse-trading, GOP leaders locked up the votes of most Republicans, peeling away traditionally antitrade GOP lawmakers who had never before voted for a free-trade agreement.

House votes customarily run 15 minutes; this one took 38. With five minutes to go, the vote stood at 215 against, and 210 for the measure. Toward the end, Democrats started chanting "Regular Order!" in a bid for Republicans to close the vote. Running on fumes, GOP leaders went to, of all places, the heavily protectionist textile states for their last needed votes. Over the furious objections of the fast-track bill's sponsor, Rep. William Thomas Rep.-California, --- who flashed a red vote card to signal his opposition --- House Speaker Dennis Hastert of Illinois, Majority Leader Richard Armey of Texas, and Whip Tom DeLay of Texas signed a letter promising South Carolina Republican Jim DeMint additional protection for textile dyeing and finishing companies. Mr. DeMint then switched his "no" vote to "yes."

Next, three Republican fence-sitters voted "yes," and the vote was tied. Finally, a visibly shaken North Carolina Rep. Robin Hayes, who had publicly announced his opposition but withheld his vote until the last minute, punched yes. At 4:38, about 10 seconds after they received the 215-214 majority, Illinois Republican Ray LaHood pounded the gavel closing the vote. In addition to special protection for textiles, Bush officials promised lawmakers special deals on everything from oranges to protein milk concentrate in order to get the vote. They also used national security, in a strategy that largely failed with Democrats, but worked with Republicans . . .

DAVID E. SANGER, NEW YORK TIMES: President Bush won a major victory on trade in the House of  Representatives today by updating a time-honored  argument: Wartime is no time to undercut the president. This is especially true now, Mr. Bush and his allies argued, when the world is watching for any sign that an embattled America is pulling up its drawbridges. . . . Perhaps more important, Mr. Bush has finally broken a political deadlock that has afflicted Washington for seven years, a deadlock over which branch of government --- the executive or legislative --- should have the greatest control over how the United States negotiates the rules of globalization.

"This is one of those votes that is partly about substance, but also about power and perceptions of power," said Clyde Prestowitz, president of the Economic Strategy Institute, and a veteran of the trade wars that have polarized Democrats and Republicans for the past two decades. "There was a perception that if the vote went against the president, he would be undercut, and we would be seen as withdrawing from the world. I don't think that was true but the perception was there."

Mr. Bush won for several reasons.

The first is that his argument about trade as a weapon against terrorism, while a stretch, actually worked. His trade representative, Robert B. Zoellick, made the case that the war against terrorism hinges on building coalitions, and that coalitions in the modern world are built on trade first and ideology second. While it pains Mr. Bush's team to admit it, this is an echo of the argument Mr. Clinton made time and again. "The difference is that the war made it clear that we really do need coalitions," a senior White House official said. "Every argument has its context, and the context of this one was a war in which we clearly need the help of developing nations around the world."

Mr. Bush's use of the patriotism card bred more than a little resentment among Democrats. Since the September 11 terrorist attacks, they have been in disarray about how to oppose the president on substantive issues without seeming out of tune with the bipartisan chorus of the times. . . .  (The 21 Democrats who voted for the bill were almost all members of a small coalition of Democrats who have tried, largely unsuccessfully, to cure the party's traditional allergy to free trade agreements.)

Still, Representative Charles B. Rangel, the New York Democrat, tried at the last moment to reach a compromise with the White House about how to deal with those labor and environmental issues. He took to the floor to protest the White House's effort to paint opponents of the bill as unpatriotic. "We don't believe that under our government, and the democratic way that we expect to legislate," Mr. Rangel said, "that what we are doing is undercutting the president of the United States." Representative Sander M. Levin, a Michigan Democrat, agreed, saying, "This debate is about trade, not about terrorism."

But the second reason that the Democrats lost is that they have yet to figure out a way to turn their fears of trade into an effective legislative strategy at home, or an effective foreign policy abroad. The reality of the post-cold war era is that trade agreements have become the basic treaties negotiated among nations. That is why Mr. Bush is so eager to use his new authority to negotiate a Free Trade Area of the Americas: Like Mr. Clinton, he sees it as a way to cement the links among democracies, weak and strong. And so when individual agreements come up for a vote, they almost always pass because the strategic cost of defeating them is simply too high. . . .

"It was always the strategic arguments that made the difference in the end," Charlene Barshefsky, Mr. Zoellick's predecessor as trade representative, argued recently. "They are the only way to trump the other concerns."

JEFF BATER, DOW JONES NEWSWIRES: Lawmakers in the U.S. House Thursday debated the controversial trade promotion bill that would give President Bush more authority in negotiating deals with overseas governments. Rep. Sherrod Brown, Dem.-Ohio, has expressed concerns that fast-track trade negotiating authority would further weaken food safety standards, especially border inspections.

Brown says the North American Free Trade Agreement, approved in 1993, placed stress on U.S. food inspection resources. "In 1992, FDA (Food and Drug Administration) was able to physically inspect about 8% of all imported food, but in 2000, FDA inspected less than one-half of 1% of all imported food," Brown said this week. "This strain on our inspection resources will grow exponentially if the president is given fast track trade negotiating authority."

The National Farmers Union has urged defeat of the bill, which would limit Congress to voting up or down on trade pacts. "Congress should maintain its constitutional authority and oversight responsibilities throughout the trade negotiating process," said Tom Buis, the NFU's vice president of government relations. "To do less will represent unilateral disarmament in the effort to achieve a level playing field for U.S. agriculture."

But other food producers have pushed hard for the trade authority, which has been defeated in the past. The National Corn Growers Association says all farmers have a lot to gain from trade promotion authority. "We cannot continue to watch from the sideline as our competition score one trade agreement after another. We must have trade promotion authority for a strong U.S. leadership role --- to enter beneficial agreements like the competition," said Lee Klein, a Nebraska corn farmer and chairman of the trade group. "We must establish ourselves as an important part of world trade, and make sure our negotiators have the ability to reduce trade barriers without interference," Klein said.

LORI WALLACH, PUBLIC CITIZEN'S GLOBAL TRADE WATCH: Reviving the moldering corpse of Fast Track today relegates U.S. policy making on globalization to an outdated, inappropriate process that guarantees increased public and congressional opposition to future trade deals. For the Bush administration, the cost of a short-term gain on this vote is a long-term standstill on U.S. trade policy. The heated, partisan debate and narrow passage of Fast Track vaporizes the crumbling remains of the bipartisan consensus on trade and guarantees that future trade agreements negotiated by the administration will be met with great skepticism.

Fast Track passed by only one vote 215-214, with 197 of the votes for Fast Track coming from Republicans --- including a bloc of Republicans "yes" votes coming from longtime foes of Fast Track, NAFTA and WTO. The stark absence of traditional Democratic "free trade" votes for this bill exposes today's action as more of the Republicans' exploitation of the war on terrorism to manipulate passage of backward, corporate boondoggles for their campaign contributors. The Republicans could not have passed this retrograde trade legislation absent the current national emergency, and the American people will remember this for what it is crass political profiteering.

The narrow and highly-charged passage of Fast Track will solidify opposition to future trade pacts among the American public and congressional critics of the trade status quo. By further polarizing the debate, proponents of corporate-managed trade could face an entirely new playing board when a redistricted Congress returns in 2002. As the array of events over the past five years shows, the anti-corporate globalization movement remains strong and effective: In 1997 and in 1998, Fast Track was stopped; in 1998, the MAI negotiations were tanked; and in 1999, the planned WTO expansion was halted.

The hundreds of rallies and protests worldwide during the WTO's Doha Ministerial last month certainly make a mockery of the propaganda campaign concerning the anti-corporate globalization movement's post-September 11 demise.


NATIONAL FARM ACTION CAMPAIGN: As the inside-the-beltway debate over farm policy hits the floor of the U.S. Senate this week, farmers across the nation are raising serious concerns about the future of families that produce the food in this country.

"Last year, the United States lost 20,000 family farmers while Cargill and ADM posted record profits, subsidized by billions of taxpayer dollars," stated George Naylor, an Iowa grain farmer. "Unless the full Senate significantly improves the farm bill approved by the Senate Agriculture Committee, we will see more of the same corporate gouging and the
hemorrhaging in the countryside will only accelerate."

"America's farmers, ranchers, and consumers desperately need a farm bill that provides long-term food security for our nation and economic security for farmers, stated Helen Waller, a Montana rancher and wheat farmer.  "While the Senate Ag. Committee bill minimally increases market prices for farmers, it will not cover farmers' cost of production.  This farm bill will continue the current policy of relying heavily on unsustainable taxpayer subsidies to prop up the farm economy."

"What we witnessed last month as the Senate agriculture committee debated its farm bill clearly illustrates the influence corporate agribusiness has on the policy-making bodies of our government," stated Larry Mitchell of the American Corn Growers Association.

Farmers point to last month's defeat of the Competition Title introduced by Chairman Harkin. The Competition Title was a new provision of the farm bill designed to mitigate the effects of corporate concentration in food production and its impact on competition.  Of all the provisions in the Competition Title, which were supported by dozens of family farm organizations, only country of origin labeling made it into the final Senate Agricultural Committee bill.

The National Farm Action Campaign called for massive grassroots pressure by farmers, taxpayers and consumers to show their opposition to the current Senate proposal.  "We can't let this go down without a fight," said Bill Christison, a Missouri farmer and President of the National Family Farm Coalition. "Farmers from across the country will be demanding true farm bill reform now and during the reconciliation of legislative proposals moving between both houses of Congress."

Members of the National Farm Action Campaign are fighting for significant improvements in the Senate Farm Bill, including support for amendments to be introduced from the Senate floor.  These amendments are pieces of a comprehensive farm bill proposal (The Food From Family Farms Act) developed by member groups to address the farm crisis.

Packers use direct ownership of livestock to force independent producers to take lower prices.  Packers also use captive supplies --- livestock they buy under premium long-term forward contracts that are kept secret between them and the largest producers --- to control the market, reduce fair competition, and keep prices to independent producers down.  A ban on packer ownership and restrictions on captive supplies will increase competition in the livestock industry, and boost the economic security of farmers and ranchers.

The Senate Agriculture Committee bill includes a billion-dollar per year Environmental Quality Incentives Program (EQIP), which will funnel hundreds of millions of dollars to factory-style livestock farms owned or controlled by corporate agribusinesses. EQIP as it has operated over its first five years has been a good program, but the U.S. Senate bill would increase EQIP funding 500% and remove the prohibition against using EQIP funds for factory-style livestock facilities for huge manure lagoons. The Wellstone amendment will stop EQIP funds from being used for giant confinement livestock operations, by continuing the prohibition currently in place.

One step towards establishing a policy that helps farmers earn a fair price in the marketplace (instead of from taxpayer-funded subsidies, which benefit the agribusiness corporations which buy from farmers, not farmers), the Senate bill should include a farmer-owned grain reserve. A farmer-owned reserve would provide for more orderly marketing, protect consumers from price surges, and could meet energy and humanitarian needs. The only significant, stored U.S. grain supply in these volatile political and economic times is owned by multinational grain corporations, which use that supply to manipulate market prices. A well-managed farmer-owned reserve will promote domestic and international food security while keeping excessive grain inventories off of the market.

For additional information contact George Naylor: (515) 544-3464; Kathy Ozer: (202) 543-5675; Larry Mitchell: (202) 835-0331 or National Farm Action Campaign 2001 Forest Avenue, Des Moines, IA  50311 (515) 282-0484; FAX (515) 283-0031


MIGUEL LLANOS, MSNBC: A congressional committee has killed legislation seeking to protect public school children and staff from certain pesticides. The provision was backed by Democrats, the nation's largest teachers union and even a pesticide group, but it was opposed by Republicans and the National School Boards Association wary of jurisdictional disputes and the possibility of costly, and unfunded, mandates. The Education Conference Committee, made up of Senate and House lawmakers working out compromises on education bills . . . voted down the School Environment Protection Act.

Jay Feldman, head of the group Beyond Pesticides, called the action "shortsighted and unfortunate. Children, teachers and school staff deserve the basic health and safety protections that this right-to-know and pest management measure would provide," he said in a statement shortly after the vote.

Among other steps, the legislation would have required public schools to notify parents about the use of bug-killing chemicals and states to develop a school pest-management plan that considers alternatives to toxic sprays. All Democrats on the committee voted for the legislation, as did one Republican. But all House Republicans voted against the amendment, ensuring its defeat.
The legislation's sponsor, Sen. Robert Torricelli, Dem.-New Jersey, said afterwards that "this is something that should have had no controversy . . . There are children playing on football fields, and students eating in cafeterias, that were sprayed with toxic materials immediately before they entered." But Republicans in the House said the provision would have created a bureaucratic nightmare, forcing school districts to comply with new rules but giving them no new funds to do so. Moreover, the legislation did not set clear jurisdictions over pesticide control, the Republicans said.

The American Crop Protection Association said that while it supported the legislation it understood the concerns of Republican lawmakers. "We recognize that the jurisdiction and `unfunded mandate' issues are significant," association president Jay Vroom said in a statement, "and we are prepared to re-engage with other stake holders --- including the environmental community once again --- to seek a new approach and new vehicle to address the issues that still remain." Torricelli and Beyond Pesticides questioned the pesticide industry's motives, with Torricelli saying there was no explanation for the defeat “except the influence of the industry itself."

The National Education Association, which represents teachers, favored the legislation, but the National School Boards Association opposed it.

Proponents of pesticide curbs in schools cite a National Academy of Sciences report --- "Pesticides in the Diets of Infants and  Children" that concluded children are among the least protected population group when it comes to pesticide exposure and that given their smaller size they are at higher risk than adults to pesticide.

U.S. SENATOR EDWARD M. KENNEDY ON THE SCHOOL ENVIRONMENT PROTECTION ACT AMENDMENT TO ESEA, NOVEMBER 27, 2001: It's an honor to be here today with my colleagues Senator Torricelli, Senator Harkin, Senator Reid, and Senator Boxer, and I commend them for their leadership in protecting students from pesticides at their schools. I also commend Congressman Rob Andrews for his leadership on the School Environment Protection Act.

In recent weeks, the nation has been gripped by the fear of biological and chemical attack. But every day in schools across the nation, children are exposed to dangerous pesticides that can make them sick. We know that in too many school districts across the country, untrained people are making critical decisions day in and day out about the use of pesticides in school buildings and on school grounds.

We know that children may be especially sensitive to even low levels of dangerous substances. We need to take special precautions to protect the development of their immune systems and their nervous systems. EPA has evidence that a large number of pesticides are carcinogenic in animal studies. Federal law now permits protections for farmers from re-entering their fields too soon after pesticide use, but no such protections are available in the case of schools.

We know from sad and harsh experience the dangerous consequences for children from exposure to lead in paint. We shouldn't have to learn these lessons again for the exposure of children to dangerous pesticides. We cannot allow schools to be chemical death traps for our children. If their schools make them sick, no measure of education reform will improve their learning. Our proposal is a needed step to protect students from the harmful effects of pesticides in and around their school buildings. Children attend school at least 180 days a year. Effective precautions are essential in order to reduce their exposure to environmental chemicals and disease.

Dealing with the harmful impact of pesticides on students and schools should be part of overall education reform. This important measure will provide needed protection by limiting the use of toxic pesticides in and around schools. Parents support the amendment because they want to know their children are safe. Teachers support it because they want to work under safe conditions, and they know that students learn more effectively when they are safe and healthy. It is long past time for Congress to take this important step to protect schools and classrooms from the dangerous use of pesticides.


RONALD D. WHITE, LOS ANGELES TIMES: In the fifth government lawsuit since 1998 targeting sexual harassment of female farm workers, the Equal Employment Opportunity Commission has sued a Central Coast wine grape grower, citing the behavior of some of its supervisory employees, including the company's former human resources director. The employment discrimination lawsuit claimed "severe and pervasive sexual harassment and retaliation" against female farm workers employed by King City-based Coastal Valley Management Inc.

"The very person responsible for investigating and resolving sexual harassment complaints at Coastal Valley was one of the chief offenders harassing these women," said EEOC Regional Attorney William R. Tamayo, "which meant that the avenues to complain or get redress for these women were effectively closed." The suit alleges that female farm workers endured unwelcome sexual advances, demands for sexual favors, unwanted touching and offensive comments that, in some cases, "lasted for a period of years."

An employee at the Coastal Valley office said no one there was willing to comment on the lawsuit. Marc Grossman, a spokesman for the Sacramento office of the United Farm Workers, and Michael Meuter, directing attorney for the Salinas office of California Rural Legal Assistance, said sexual harassment of female farm workers is a widespread problem but is seldom reported.

"The women are often too fearful of losing the jobs that support their families. They also fear the loss of respect from spouses and family members," said Meuter, whose office is seeking to join the EEOC lawsuit on behalf of four women. "Sexual harassment happens so often that the EEOC could fill all of its time filing these kinds of cases," Grossman said. "The foremen and supervisors and other administrators have complete control over farm workers' livelihoods. They go begging hat in hand for jobs, and there is no job security or seniority," Grossman said.

The action against Coastal Valley follows two other sexual harassment EEOC lawsuits, against Fresh West Harvesting of Gonzales, California, and Tanimura & Antle in Salinas, California, and Yuma, Arizona, in 1998. Those cases were settled for $90,000 and $1,855,000, respectively. Two other EEOC sexual harassment lawsuits that were filed and later settled involved Golden Valley Produce and William Bolthouse Farms in Bakersfield in 2000 and Sunmet Agribusiness in the San Joaquin Valley this year. The Sunmet case was settled for $45,000 and mandated sexual harassment training for company managers and supervisors. The Golden Valley case was settled for $150,000 for two female employees.


ASSOCIATED PRESS: Decatur-based grain processor Archer Daniels Midland Co. was fined $35.3 million in a European Union investigation of companies involved in the soft drink and beer industries. A two-week crackdown has brought in almost $1 billion in fines. "If you try to sew up the market in secret deals, we will catch you and make you pay," said European Union Commission President Romano Prodi.

ADM has been involved in three cartels investigated by the commission: the company was fined $42.1 million for participating in a cartel involving lysine, an amino acid used in animal foodstuffs, in June 2000 and it was fined 10 million euros for a cartel involving sodium gluconate. The commission [has] fined five companies a combined total of $120 million for colluding to fix prices in the global market of the soft drink additive citric acid.

It also fined four Belgian beer brewers $81 million for setting up price fixing cartels on the local market. The cases followed the November 21 decision to levy a record fine of $752 million against eight chemical and pharmaceutical companies for fixing vitamin prices. "For the second time in a fortnight, the commission has taken tough action against organized cartels which have been ripping off customers in Europe," Prodi said.

Besides ADM, American company Haarmann & Reimer Corp., the Swiss firms Hoffmann-La Roche AG and Jungbunzlauer AG, and Dutch company Cerestar Bioproducts BV took part in a worldwide cartel between 1991 and 1995 in the citric acid industry, the commission said. Citric acid is the mostly widely used preservative in the world for soft drinks, jams and deserts.

Roche and Archer Daniels Midlands were hit the hardest, with fines of $56.5 million and $35.3 million respectively. EU Competition Commissioner Mario Monti said it showed "how widespread these secret practices are, or at least, used to be. I am confident that the
message is now being clearly received." The citric acid case marks the second time Roche has been fined in as many weeks. It was fined the largest amount, $411 million, in the vitamin price-fixing probe.

"Roche has been fully cooperating with the EU Commission since these practices came to light," the Basel-based company said, adding it was reinforcing "its commitment to conducting business in full compliance with all local and international laws." The company said it was still considering whether to appeal the fines. There have been $1.35 billion in antitrust fines so far this year, which is about two percent of the EU's annual budget, said Commission spokeswoman Amelia Torres.  EU authorities can fine companies up to ten percent of their total annual sales in cartel cases.

The commission fined Belgian beer giant Interbrew NV $41.5 million for taking part in two beer price fixing cartels, saying the world's second biggest brewer colluded with its main Belgian rival, Alken-Maes to set prices and divide the market. Interbrew and Alken-Maes are the largest and second-largest brewers in Belgium. The commission said the cartels took place over from 1993 to 1998 when Alken-Maes was still owned by French food group Danone. Alken-Maes received a fine of $39.8 million.

A second cartel concerned beers sold under supermarket brand names. This cartel, which operated from October 1997 to July 1998, also involved Interbrew, Alken-Maes and two small brewers, Haacht and Martens. Haacht and Martens were each fined $239,000; the commission noted the sector involves only five percent of beer consumed in Belgium.


PERRY BEEMAN, DES MOINES REGISTER: A landmark $50 million settlement that forces a Missouri hog-confinement company to cut its pollution could mean new attacks on livestock pollution in Iowa, observers said last week. "This is going to be an atomic bomb on the industry," said lawyer Charles Speer of Overland Park, Kansas, who represented the Missouri neighbors who sued Premium Standard Farms. . . .

Premium Standard Farms agreed to cut its sewage pollution by half and to allow air testing by Purdue University that could lead to new limits on emissions. Hugh Espey of Iowa Citizens for Community Improvement, which fights confinement pollution, believes the Citizens Legal Environmental Action Network's five-year legal fight in Missouri set the stage for citizen lawsuits in Iowa.

"It wouldn't surprise us a bit if in the next six months something like this is initiated in Iowa," Espey said. "Any time a big and very visible company like Premium Standard Farms is involved in something like this, it sends a message to the whole industry."

A Premium Standard Farms spokesman has said the case is a significant change in how the industry is treated. In the past, large-scale confinements have not faced strict enforcement of pollution rules under the federal Clean Water and Clean Air acts. The often-fined Missouri confinement company settled under federal pressure to clear its legal slate. Premium Standard Farms agreed to pay $357,000 and to cut pollution using techniques that could cost $50 million or more. . . . .

Iowa Citizens for Community Improvement filed a legal petition demanding limits on air emissions from Iowa hog confinements. That debate has been postponed until researchers at Iowa State University and the University of Iowa make recommendations in February. The schools are researching whether various emissions affect health.

Bryan Bunton of the Iowa air-quality bureau said the Premium Standard case draws attention to efforts to treat hog confinements more like factories or municipal sewage-treatment plants. "It does just because of magnitude of the case," Bunton said. "It's really the first of its kind." Bunton added that Missouri has confinements far larger than Iowa.

"What triggered that case was the fact that Premium Standard Farms was caught in repetitive violations and they were a real pain for the neighbors living near the factories," he said. "I don't know if we really have a situation like that in Iowa." Wayne Gieselman, the Iowa Department of Natural Resources' lead staff member on confinement rules, said Iowa has nothing like the massive hog concentrations in North Carolina and Missouri. He doesn't expect the Missouri case to change the situation in Iowa soon. . . .

Speer said the Missouri confinement neighbors didn't get what they wanted --- an immediate end to pollution they say makes them sick and presents a nuisance. However, they are heartened that the case may be used to tighten controls in other states, he said.


DAVID MOELLER, FARMERS LEGAL ACTION GROUP & BEN LILLSTON, INSTITUTE FOR AGRICULTURAL AND TRADE POLICY: Farmers face a number of complex legal liability risks related to genetically modified crops that the courts are only beginning to address, according to new briefing paper published by the Institute for Agriculture and Trade Policy and Genetically Engineered Food Alert, in collaboration with the Farmer to Farmer Campaign on Genetic Engineering.

"Farmers assessing the costs and the benefits of growing GMO crops should base their decisions not only on production costs and expected yields, but also on the legal liability they may incur by planting, growing, and marketing GMO crops," says the author of the paper, David Moeller ---a staff attorney at the Farmers' Legal Action Group, Inc. (FLAG) --- based in St. Paul, Minnesota.

The paper, "GMO Liability Threats for Farmers," details a number of legal risks including those associated with the cross-pollination of certain GMO crops --- particularly corn and canola --- with crops grown on neighboring farms. "Farmers and seed companies who are responsible for genetically contaminating neighboring fields might be liable for a neighbor's damages based on tort claims of trespass to land, nuisance, negligence, or strict liability," the paper found.

"Farmers are being sued for having GMOs on their property that they did not buy, do not want, will not use and cannot sell," says North Dakota farmer, Tom Wiley. "If I contaminate my neighbor's property, I am held responsible.  Farmers need legal protections to ensure that if the biotech industry contaminates their crops with GMOs, the industry is held responsible."

The paper found that farmers with marketing contracts to sell non-GMO crops may be responsible for damages if their crops become contaminated. In addition, farmers that sign technology agreements, as well as those that don't, are facing legal challenges from biotech companies like Monsanto.

The paper highlights the ill-fated introduction of StarLink corn into the human food supply and the difficulties farmers faced with Aventis' (StarLink's manufacturer) buy-back program, including delays in receiving compensation, and the continuing possibility of civil litigation over contamination issues. There are currently at least nine class action lawsuits in six states related to the StarLink debacle.

"Farmers are in a very vulnerable position," says Kristin Dawkins, of the Institute for Agriculture and Trade Policy. "Farmers need these legal issues clarified so they can make informed planting decisions." The paper is the first in a series of papers published by the Institute for Agriculture and Trade Policy and Genetically Engineered Food Alert on legal and economic issues related to genetically modified crops.

"GMO Liability Threats for Farmers," can be found on the website of the Institute for Agriculture and Trade Policy


ERIC PIANIN, THE WASHINGTON POST: Despite continuing concern that the nation's food supply could become the next terrorist target, industry leaders have blocked or diluted proposals to strengthen federal policing of domestic food processors and imported food.

Since the September 11 attacks, counterterrorism experts and lawmakers have warned that the nation's agricultural and food processing industry --- regulated by more than a dozen federal agencies --- is vulnerable to biological attacks that could kill Americans and send the industry into an economic tailspin. Health and Human Services Secretary Tommy G. Thompson said recently he is especially concerned that foreign terrorists could contaminate food imports because of lax inspection and security at 300 ports of entry.

Yet the politically potent food industry, led by the National Food Processors Association, the National Grocers Association and the American Frozen Food Institute, has vigorously --- and effectively --- argued that government and industry food safety and quality control systems are more than adequate to meet any threat. Rather than expanding government regulations, industry officials say, Congress should simply provide more inspectors and more funding.

"I think we've already got the system in place to deal with terrorism," Kelly Johnston, executive vice president and chief lobbyist for the food processors, said last week. "We just need more information from the government to make sure we can address any potential threat."

What security experts fear is not, generally speaking, mass poisoning of wheat fields or food processing plants; because the food supply is so diffuse and diverse, that would be logistically difficult to do on any meaningful scale. What they do fear is the nationwide panic that terrorists could induce by contaminating even a few shipments of imported food or by introducing a virus deadly to U.S. livestock or crops.

Panic could have a devastating economic impact, much as the outbreak of foot-and-mouth disease in Britain virtually destroyed that country's beef industry. And the worst hit, ironically, would be the producers who have lobbied successfully against new regulations. "While you would certainly inflict some casualties, what you're doing with agriculture bioterrorism really is attacking our economy," said Jerry Jaax, a bioterrorism expert at Kansas State University. "It's an assault on our way of life."

Food is big business in America -- the U.S. meat industry alone reported $100 billion in sales last year, and food processors generated $490 billion in revenue --- and it has commensurate political clout. Last year, agribusiness and food processors contributed $13.9 million to Republican and Democratic candidates, according to the Center for Responsive Politics. The industry opposes more government regulation because it adds to its operating costs, forces companies to open their books to investigators and could result in delays in moving perishable goods to market. . . . . . .


JANET KUBAT WILLETTE, AGRI NEWS: Consolidation in agricultural production may be slowed by environmental concerns, say two economists. Consolidation has swept through the rest of the U.S. economy. Michael Swanson, Wells Fargo and Company agricultural economist, said all firms are getting larger in order to compete in a Wal-Mart world and because no one is stopping them.

Now, 21 million people work for Wal-Mart and its related companies and the retailer is expected to be the nation's largest employer in three to four years, surpassing the federal government, Swanson said. The top 20% in any market benefit from increased consolidation and the bottom 20% are forced to exit. The remaining 60% can either go up or down, he said.

But regulatory backlash may stop the trend toward ever-larger farms. "We're resented in many areas of the world," said David Kohl, Virginia Tech professor of agricultural and applied economics, because of globalization, capitalism where the rich get richer, and bigness. In Europe, small farms are nurtured not only because the citizens once went hungry, but also because the nation wants a balance between urban and rural dwellers and because it doesn't want overcrowded cities. There is also a desire to keep small farms.

Already in the United States, 35 cluster areas are generating 70% to 80% of the country's agricultural production, Kohl said. . . . But massive agricultural consolidation also increases the risk to the food supply. If there is a weather event, disease outbreak or bioterrorism attack, the food supply could be destroyed. The country shouldn't put all its eggs in one basket, Kohl said.

Likewise, "farmers shouldn't believe all they hear about South American commodity production," Swanson said. China is a bigger threat. China has a 45% to 50% yield gap with the United States, but has more acres cultivated than Brazil and Argentina combined. The nation wants to be self-sufficient and isn't a perennial exporter. "China's a huge threat," Swanson said, listing several commodities where China has disseminated the U.S. market, including tomatoes, apples, aquaculture and garlic. Mexico, on the other hand, is a leading trading partner for the United States and this country must continue to nurture that relationship, Swanson said.


PAUL KRUGMAN, NEW YORK TIMES: When a seemingly profitable enterprise suddenly goes bankrupt, there are surely lessons to be learned. When that enterprise is the most admired company in America, lauded by business theorists as the quintessential 21st-century corporation, one wonders if it is the tip of an iceberg. And how many of us have, without knowing it, booked passage on the Titanic?

It will take time, and many legal proceedings, before the full story of Enron's collapse becomes known. But one thing is already clear: The case shows how adept corporate executives have become at shifting risk away from themselves and onto others, in particular onto their employees. Enron's leaders have walked away from the debacle chastened but very, very rich. Many of Enron's employees --- no doubt including the loyalists who sent irate letters every time I criticized the company --- have lost their life savings. . . .

But the sad fate of Enron's employees highlights the difference between theory and practice. As Gretchen Morgenson of The Times pointed out on Sunday, workers across the country have been cajoled or coerced into holding a high proportion of their retirement assets in their employers' own stock. The exploitive nature of this financial incest was emphasized by Enron's now-notorious "lockdown," in which --- purely by coincidence, say executives --- new rules forced employees to remain invested in the company's stock just as the firm began its death spiral. So much for freedom of choice.

And even when employees have real choices, one wonders whether they fully appreciate the risks. The shift away from old-fashioned pensions coincided with an enormous bull market; surely many workers who have never seen stock prices fall since they became investors underestimate the risk of capital losses.

One hopes that corporate collapses will not become commonplace. Still, it's highly likely that millions of American workers will have near-Enron experiences, learning to their dismay that big chunks of their retirement savings have evaporated. They will be left dependent on the one great defined-benefit program that remains: Social Security. That is, if it's still around. . . . .

The Bush administration's commission on Social Security reform issued its latest report last week, just as Enron entered its death throes. Most of the criticism of that commission's work, my own included, has focused on its, yes, Enron-like accounting: items seem to migrate onto or off the balance sheet to suit the commission's convenience. Thus when the Social Security system takes in more money than it pays out, as it does at present, this has no significance --- the federal budget is unified, you see, so it doesn't mean anything when one particular piece of it is in surplus. But in 2016, when the Social Security system starts to pay out more than it takes in, there will be a crisis --- Social Security, you see, must stand on its own. But the commission resorts to bogus accounting only to make the case for its ultimate objective: to convert Social Security from a defined-benefit system, which guarantees retired Americans a certain basic income, to a defined-contribution system, in which the unwise or unlucky can find themselves destitute in their old age.

Some analysts I know think Social Security will be converted to a defined-contribution system, not because it is a good idea but because the financial industry --- which has enormous clout in our money-driven political system --- has so much to gain from the conversion. I hope they're wrong. But if they are right, the fate of Enron's poor employees, victimized by a management team they thought was on their side, may truly be the shape of things to come.


With each issue of THE AGRIBUSINESS EXAMINER I am pleased to note the
additional readers that have been added to the circulation list of the already over 1000
readers throughout the world who are presently receiving it on a regular basis. At the
same time, however, it is disappointing to also see that the same mere handful of
generous financial contributors, whose help I sincerly appreciate, care to assist in
sustaining the work of the publication.

While THE AGRIBUSINESS EXAMINER is a subscription free e-mail newsletter it
always welcomes contributions of any amount in the hope that readers still value THE
AGRIBUSINESS EXAMINER to such the extent that they will willingly and generously financially support its continued circulation as it enters its third year. Checks should be
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A.V. Krebs and sent to P.O. Box 2201, Everett, Washington 98203-0201


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